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New Standard Mileage Rates

The
Internal
Revenue
Service
today
issued
the
2016
optional
standard
mileage
rates
used
to
calculate
the
deductible
costs
of
operating
an
automobile
for
business,
charitable,
medical
or
moving
purposes.
Beginning
on
Jan.
1,
2016,
the
standard
mileage
rates
for
the
use
of a
car
(also
vans,
pickups
or
panel
trucks)
will
be:

-54 cents per mile for business
-19 cents per mile for medical purposes
-14 cents per mile in service of charitable
organizations

Things To Know

American Opportunity Tax Credit: Available to college students of all ages, this credit is based upon college expenses and can provide up to a $2,500 tax reduction per year for four years.

Earned Income Tax Credit: Offered to low-income families, this credit is refundable, which means the government will send you cash even if you don't owe any taxes. Sometimes this is overlooked when eligible families have incomes so low they aren't required to file returns so they miss out on claiming the credit.

Child and Dependent Care Credit: If you pay someone else to watch your children while you work, you may be able to claim a credit. Depending on your income, you could get a credit of up to 35 percent of qualified expenses up to $6,000

State Income or Sales Tax Deduction: You can deduct state income tax you paid from your federal return. If your state doesn't charge an income tax, you can use the amount paid in state sales tax instead.

IRA Contributions: While contributions to Roth IRAs are not deductible, depending on your income and whether you have a retirement plan at work, you can deduct up to $5,500 if you put money in a traditional IRA. If you're age 50 or older, the limit is increased to $6,500.

What to know about 2016 taxes and your health insurance:

As you begin to gather the information you need to file your taxes, it's important to remember that information about your health coverage is now a part of the tex filing process. Here's what you need to know if you have Marketplace coverage:

If you enrolled in Marketplace health coverage in 2016, you'll soon get an important tax document in the mail, called Form 1095-A. Your 1095-A includes information you need in order to complete your 2016 federal income tax return. You should wait to file your income tax return until you receive this document in the mail. It should arrive by early February. When it arrives keep it with your other tax records, like the W-2 you get from your employer.

If you got financial help to lower the cost of your monthly premiums, you must file a tax return, even if you typically wouldn't have to, and report the amount of financial assistance you got. The amounts will show on your 1095-A. Now that you know your final income for the year, you need to reconcile the difference between the amount of financial assistance you got with the amount you should have gotten based on your 2016 earnings. Information included on your Form 1095-A will help you do this. If you don't file a tax return and reconcile your financial help, the Marketplace can't continue to give you financial help in the future.

Remember, the fee for not having coverage is increasing again this year. If you go without health coverage in 2016, the fee you'll have to pay next year will increase to $695 or 2.5 percent of your income - whichever is higher. The good news is Open Enrollment for 2016 coverage is happening now and runs through January 31. If you still need coverage and want to avoid paying a fee next year, you must sign up for coverage before January 31.

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Latest news

The IRS will begin to release EITC/ACTC refunds starting Feb. 15. However, the IRS cautions taxpayers that these refunds likely won't arrive in bank accounts or debit cards until the week of Feb. 27th -- if there are no processing issues with the tax return and the taxpayer chose direct deposit. This additional period is due to several factors, including banking and financial systems needing time to process details.